A basis for the allocation of delivery expenses to other departments which results in an answer that is not an estimate is:
A) number of deliveries.
B) sales volume.
C) cubic volume of deliveries.
D) the allocation of indirect expenses is always an estimate no matter which method is used.

Question

Quizplus · Accepted Answer

The allocation of indirect expenses, such as delivery expenses, to other departments is inherently an estimate because it involves distributing costs based on a chosen basis (e.g., number of deliveries, sales volume, cubic volume of deliveries) that approximates the use of resources. There is no method that results in a non-estimative allocation because the process itself is designed to apportion shared costs in a way that is inherently approximative and not directly measurable.

A Basis for the Allocation of Delivery Expenses to Other